Law Commons^™

The Case For An Unbiased Takeover Law (With An Application To The European Union), Luca Enriques, Ronald J. Gilson, Alessio M. Pacces

Faculty Scholarship

Takeover regulation should neither hamper nor promote takeovers, but instead allow individual companies to decide the contestability of their control. Based on this premise, we advocate a takeover law exclusively made of default and menu rules supporting an effective choice of the takeover regime at the company level. For political economy reasons, we argue that different default rules should apply to newly public companies and companies that are already public when the new regime is introduced. Newly public companies should be governed by default rules that favor the interests of (minority) shareholders over those of management and controlling shareholders, because …